Name: Financial Statements - Lecture 8 - The Statement of Cash Flows - IFRS
Uploaded: 2017-06-23T13:02:31.000Z
Duration: 9 min 47 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

And in this video, we'll be exploring the statement

The statement of cash flows is the last statement

before the notes to the financial statements.

Remember, this is for public corporations who must use IFRS

and private corporations who choose to use IFRS.

the interconnection between the various statements using

Now you'll see in the far left column, the statement name

and the amount that is carried to another statement.

you see which statement this amount is carried to.

Let's focus on just one row, so that you can see an example.

Here, you can see that the profit or loss

used as an opening number in the statement

It is also added or deducted from the opening retained

earnings on the statement of changes in equity.

for operating activities in the statement of cash

You can also see, very quickly, that the profit or loss

amount is never used directly in the statement

shows you the interconnection between the different financial

Let's go back to the full matrix and focus on the last row.

It shows that cash from the current asset

section of the statement of financial position

is used as the closing cash on the statement of cash flows.

If you look at the last column in the matrix,

interconnected to the statement of cash flows,

the profit or loss from the income statement,

and the closing cash balance from the statement

it is one way to understand this concept.

prepared using the direct or indirect method.

Let's quickly look at the differences before we move on.

The direct method lists the inflows and outflows

from each type of operating activity a company performs.

Cash flow categories can include cash collected from customers,

cash paid to suppliers, and cash paid to employees,

This method is preferred by IFRS because it

is more informative for users, clearly showing the sources

The indirect method focuses on the differences

between net income under accrual accounting and cash

It starts with net income and adjusts for non-cash items.

The direct method is more difficult for users

to understand, but it does not stop approximately 98%

of all US, European, and Canadian companies

from using the indirect method to calculate cash flows

Because it's easier and less costly to prepare.

One benefit for users of the indirect method

is that it highlights earnings management.

when we cover the development of the cash flow

As you can imagine, we'll be using the statement of cash

flows indirect method for purposes of all of our videos.

into three activities, operating, investing,

Description of these activities have already

Financing is activities that fund a company either

Investing is activities that result from buying or selling

property, plant, equipment, intangibles, or investments

Operating activities is when a company does their business

day-to-day, selling and delivering goods or services.

Let's do a quick check of your understanding so far.

The payment of interest on a long term loan

is considered either an operating or financing

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Financial Statements - Lecture 8 - The Statement of Cash Flows - IFRS

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